Gateley announces its intention to launch IPO
Gateley was established in the 19th Century, and has over 380 fee earners across six offices in England and an office in Dubai. Gateley provides high quality, integrated partner-led, client-focussed legal services across five core groups to over 4,000 corporate and 1,500 private clients. These core areas are Banking and Financial Services, Corporate, Business Services, Employment and Pensions and Property.
Over the last ten years Gateley has grown its revenue by a compound annual growth rate ("CAGR") of 14.3% and operating profit by 14.8%, with strong cash generation and a typical cash conversion of 95% every year over the last three years supporting both growth aspirations and an attractive dividend policy.
In 2014 Gateley took advantage of changes to the law in England and Wales to adopt an Alternative Business Structure ("ABS") allowing non-lawyers to own and invest in law firms. The Board believes the combination of the new ABS, the transition from an LLP to a PLC and first mover advantage through the proposed AIM listing, will provide a platform to expand and diversify its business through:
· Greater opportunities to grow Gateley both organically and by selective acquisition - including lateral hires of individuals or teams, or of other legal firms which offer geographical expansion or specialist services;
· The opportunity to acquire businesses offering complementary professional and other business services;
· Alignment, through share participation, of employees' goals with those of the business, aiding retention of staff and adding to Gateley's recruitment appeal;
· Facilitating a more flexible career structure, further widening Gateley's appeal in the employment market; and
· Enhancing the visibility of Gateley generally.
Key highlights:
A leading full service national commercial law firm
· The Group provides legal services to over 5,500 clients, across multiple sectors from six UK offices in Birmingham, Leeds, Leicester, London, Manchester and Nottingham as well as an office in Dubai
Differentiated through high client satisfaction rankings and a strong national brand
· Excellent rankings in legal tables and surveys helps drive new business
· Gateley has won numerous awards since 2010 and 94 of the Group's lawyers are ranked as 'Leading Individuals' in the 2015 edition of Chambers (a leading industry directory)
· No dependence on any individual client with 30 clients representing approximately 31% of gross billings
Highly experienced and committed management team
· Four of the six management board members have been at Gateley for over 20 years
· Proven track record of successfully integrating acquisitions and establishing and growing new offices
· All 81 selling partners are locked in for five years demonstrating long term commitment and alignment to the Group's performance
The Group has a track record of sustained growth supporting an attractive dividend policy
· Over the last ten years the Group has delivered profitable growth with CAGR of 14.3% in revenue and 14.8% in operating profit - this growth has exceeded the industry CAGR in turnover of 4.1% over the last five years
· For the year ending 30 April 2014, Gateley reported revenues of ?54.6m (2013 : ?51.4m) and adjusted profit before tax1 of ?7.4m (2013 : ?5.1m)
· For the six months to 31 October 2014, Gateley reported revenues of ?26.7m (H1 2014 : ?23.1m) and adjusted profit before tax of ?2.6m (H1 2014 : ?1.0m)
· Progressive dividend policy to pay an interim and final dividend of up to 70 per cent. of adjusted profit after tax
A changing and growing legal services market
· Changes to legislation have created a new environment for the provision of legal services, one that is expected to facilitate further merger activity and consolidation within the UK sector. The UK legal market services sector generated fee income worth approximately ?30 billion in 2014 and continues to exhibit growth
Value enhancing growth strategy
· Having established a strong brand, profitable business and leading position in the UK-centric mid- market legal services sector, the Group's strategy is to continue to develop its business by organic growth, but also by way of acquisition
· Organic growth to be achieved by way of alignment, through share participation, of employees' goals with those of the business aiding retention of staff and enhancing Gateley's recruitment appeal
· The Group will seek to successfully acquire legal teams or firms offering niche services, sector specialism or geographic expansion and complementary business services, enabling cross-selling to existing clients and representing a stronger sales proposition for potential new clients
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